The latest Macroeconomic Update from the Ministry of Finance & Planning reinforces a long-standing truth: tourism remains the lifeblood of the nation’s economy. Despite emerging challenges in global markets and regional competitors, the Maldivian tourism sector has shown resilience and adaptability, albeit with growing complexity and caveats that demand strategic attention.
Tourism’s Economic Weight: the Giant Among Sectors
In 2024, the tourism sector accounted for a remarkable portion of the Maldives’ real Gross Value Addition (GVA), contributing MVR 22.4 billion — a 7.3% increase over the previous year. This surge was fueled by a record-breaking 2 million tourist arrivals, an 8.9% growth year-over-year, marking a full recovery and then some from pre-pandemic numbers.
Despite a slight dip in the average duration of stay — a crucial indicator for revenue per tourist — tourism remained the primary driver of real GDP growth, which reached 5.1% in 2024. In the first three months of 2025, only a 0.7 % bed night growth was observed amongst tourist arrivals. Projections for 2025, however, show a tempered GVA growth of 2.5%, revised downward due to weaker-than-expected performance in the first quarter.
Yet even in this cautious climate, the tourism sector supports medium-term national growth, with projections of 6.5% average annual GVA expansion through 2028. These forecasts reaffirm that tourism is not just a pillar of the economy — it is the foundation on which nearly all other sectors rise or fall.
The Airport Effect and Infrastructure Linkages
The report attributes infrastructural development, particularly the upgrades to Velana International Airport and Hanimaadhoo International Airport, to unlock the next wave of tourism growth in the Maldives. These expansions are central to the optimistic scenario for 2026, when tourist arrivals are projected to reach 2.4 million and tourism GVA could rise by 6.9% to MVR 24.5 billion.
This airport-driven boost is significant not just for tourism numbers but for its cascading effects across transportation, wholesale trade, and construction. For example, the transportation and communication sector, closely tied to tourism flows, saw a 13.5% expansion in 2024 and is projected to grow by 11.3% in 2026. Likewise, the construction sector is forecasted to grow by 4.6% in 2025, partially due to tourism-driven demand for new resorts and supporting infrastructure.
Tourism Spillovers: Sectoral Symbiosis
The tourism sector’s impact extends far beyond hotel rooms and beaches. Wholesale and retail trade, another tourism-linked industry, expanded by 5.9% in 2024 and is expected to grow steadily, contingent on tourism performance. Similarly, public administration, education, and healthcare — sectors often bolstered by tourism-related revenue — grew an impressive 14.2% in 2024, largely due to expanded government spending made possible by tourism-generated fiscal space.
Shifting Market Trends and Emerging Risks
A closer look at source markets reveals both opportunities and vulnerabilities. China has reemerged as the top tourist market with 11.7% of total arrivals in 2024, boosted by seasonal travel around the Chinese New Year. European markets, particularly the UK and Germany, continue to play a strong supporting role, while the Indian market, once dominant, has declined but stabilized as the sixth largest source.
However, a decline in the average duration of stay — now at 6.1 days for 2025 under the baseline scenario — poses a financial headwind. With revenue per tourist under pressure, the government has acknowledged the need for more effective marketing and data-driven pricing strategies to extend stays and increase tourist spending.
Forecasting Growth: A Tale of Two Scenarios
The 2025 outlook is framed around two key scenarios:
- Baseline Scenario: Predicts 2.2 million arrivals and 13.5 million bed nights — a modest 2.1% increase from 2024, reflecting global economic uncertainties and a drop in stay durations.
- Optimistic Scenario: Anticipates a stronger rebound, with 13.9 million bed nights and 5.2% growth, assuming that airport upgrades and targeted promotions begin delivering earlier-than-expected results.
In both cases, the trajectory toward 2026 remains upward, signaling long-term confidence in the sector’s fundamentals.
Policy Imperatives and Strategic Focus
The report highlights the introduction of a Guest Registration System, expected in 2026, as a key step toward improving data accuracy and fiscal compliance, especially among guesthouses. This reform is vital, given the discrepancies previously observed between MoTE and MIRA bed night data — issues that led to overestimated growth figures and distorted policy decisions.
Additionally, the government’s shift toward using Green Tax data from MIRA reflects a welcome move toward robust and verifiable economic reporting.
Conclusion: Tourism as the Pulse of Progress
The 2025 Macroeconomic Update reinforces what Corporate Maldives has long observed: the nation’s prosperity is intrinsically linked to its performance in tourism. While the sector faces structural and external pressures — from fluctuating stay durations to dependency on a few source markets — the long-term outlook remains strongly positive.
What is now needed is a sharpened strategic focus on diversification, sustainability, and data integrity. If these elements are executed effectively, tourism will not only continue to drive GDP growth but also serve as the linchpin for national resilience and transformation in the years ahead.
